Prime Minister answers Muscat on the Budget

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This livestream has now ended.

Prime Minister Lawrence Gonzi is this evening replying to the comments made by Opposition leader Joseph Muscat on the Budget.

His speech will take about two hours and is being streamed live (above) and reported live (below).

Following the speech, Nationalist MP Franco Debono is expected to explain his vote. His remarks will be reported separately.

Live coverage: Prime Minister answers Muscat on the Budget

The event has now ended, here is a transcript of the live coverage.

18:30 pmChristopher Scicluna

Parliamentary questions have just been concluded. Most MPs are in the Chamber and the Strangers' Gallery is filling up.

18:32 pmChristopher Scicluna

The Prime Minister is about to start his address.

18:34 pmChristopher Scicluna

Dr Gonzi says five years since the people chose the PN to lead the government because it had a history of making the right choices. Those who had tried to scare the people that EU membership was detrimental had been proved wrong. The right choices benefited everyone, and the PN had a track record of making the right choices,

18:36 pm

Jeffrey Pullicino Orlando, Jesmond Mugliett, Franco Debono and Robert Arrigo are among the government MPs not yet in the Chamber.

18:36 pmChristopher Scicluna

The government had needed to make tough choices in the past five years. Sometimes the people were asked to make sacrifices. What was certain was that five years on, the country was better and stronger than five years ago. The economy was better geared for the future, finances were on a stronger footing, health remained free and there had been considerable progress in both health and education.

18:37 pmChristopher Scicluna

The people would be asked to make their choices once more in the coming weeks,. It was a crucial choice which could make a major difference to people's lives.

18:39 pm

The Strangers Gallery is full.

18:39 pmChristopher Scicluna

Malta had a record of 152,000 gainfully occupied persons, including a record number of women in full and part-time employment. The government had created more than 20,000 jobs - a statistic whose accuracy the government had repeatedly explained.

18:41 pmChristopher Scicluna

Had 20,000 jobs not been created, unemployment would be far higher than at present.

18:42 pmChristopher Scicluna

Job creation was the most important record for the Nationalist government. Still, the government would continue to work hard on job creation for as long as there were people who were genuinely looking for work.

18:44 pmChristopher Scicluna

The most worrying days of the past legislature were in 2008-2009 when some factories were as risk of closing down or downsizing. Those were incredibly difficult days which terrified the workers. But the government came to their aid and its intervention ensured that those factories stayed open and grew

The past five years had seen substantial investment in education, with Maltese classrooms among the most advanced. At the same time more students in tertiary education started receiving stipends. New opportunities were also created for students who had not been so successful in their studies.

18:50 pmChristopher Scicluna

In Malta, thousands of young people were celebrating their graduation. That was the fruit of the Maltese people's investment. These young people would mean a better future for Malta. Others, in vocational training, were finding new opportunities in places such as the aviation and pharmaceutical sectors and manufacturing.

18:52 pmChristopher Scicluna

Over the past five years too, thousands of parents could see how children's allowance had been increased. The parents of young children could see how the number of childcare centres had been increased. These parents had benefited from reduced income tax for those filing a parent's tax return..

18:53 pmChristopher Scicluna

This government had given parents a real choice in their children's education and Church schools were therefore given millions in subsidies.

18:54 pmChristopher Scicluna

Mater Dei Hospital was opened five years ago and had brought about major changes in the health sector. Many countries were envious of the health services offered to the Maltese, all free of charge. This government was providing more medicines free of charge, including Herceptin for cancer patients. A new cancer hospital was also being built.

18:56 pmChristopher Scicluna

Over the past five years, pensioners were, for the first time, allowed to work without losing any of their income. And those aged 80 were receiving an allowance of €300 over and above other benefits.

18:57 pmChristopher Scicluna

Over the past five years, Malta gained new respect from other countries, having made responsible choices particularly in the earliest phase of the uprising in Libya. Malta declared its position in favour of the rebels in Libya even when the situation for them appeared bleak.

18:58 pmChristopher Scicluna

The logical conclusion was that in the past five years, this country was changed for the better, despite difficult circumstances. And the Budget showed that change would continue.

18:59 pmChristopher Scicluna

After tonight, whether or not the Budget was approved, the country would face a general election because this legislature was coming to an end. It would be far better for the country if the election was held when the Budget was approved. This would depend on the vote and he hoped that common sense and the national interest would prevail. Everyone had to shoulder his responsibilities,

19:00 pmChristopher Scicluna

If the Budget was not approved he would ask the President to dissolve parliament, He would give him a date when to dissolve the House and when elections would be held.

19:01 pmChristopher Scicluna

The two parties had agreed to enjoy Christmas and the electoral campaign would start on January 7. The Cost of Living Allowance for the private sector would be introduced immediately but other measures depended on approval of the Budget.

19:03 pm

(Franco Debono just walked into the Chamber and sat on the last bench, the one closest to the Speaker. He is now talking to the Speaker.)

19:04 pmChristopher Scicluna

This Budget was showing how government finances had been placed on a sound footing, with the deficit now 1.7% of GDP, one of the best in the EU. Subsidies had been discontinued and channelled to the areas where those funds were most needed, such as health, education and the environment.

19:07 pmChristopher Scicluna

He had also faced instability within the government and the PN, In everything, he put the national interest first. He had done his best to ensure that this country could continue to move forward amid the tempests which brought other countries to their knees. And the country now had the results it could be proud of - a record workforce, strong finances and economic growth.

19:08 pm

Some decisions being taken by the Leader of the Opposition should be condemned. He was promising everything to everyone without explaining how he would fund them. He was even hiding some things from the people.

19:09 pm

He had criticised the government on the dockyard privatisation, meaning that he would have retained it, despite the burden equivalent to 30% of the national debt. How could this be acceptable?

19:11 pm

He had criticised pension reform, even though this assured young people of a sustainable pension. He falsely accused the government of wanting to raise the retirement age. In the past he claimed that health services would be billed. Time had showed how wrong he was.

19:11 pm

Dr Muscat had criticised the government on Mepa and yet was promising everyone that permits would be issued - as in Lorry Sant's time.
He criticised the bus reform, but forgot how Malta now had better, cleaner and more accessible buses.

19:13 pm

Dr Muscat had criticised the government for raising the utility tariffs, yet under the Labour government, when oil prices were just $12 a barrel, Dr Muscat wrote to Dr Sant to congratulate him after tariffs were raised. A case of two weights and two measures, if ever there was one.

19:13 pm

(Franco Debono looks impatient. He walked past the Prime Minister when returning from the Strangers Gallery.)

19:14 pm

(As Dr Gonzi spoke on reforms, Dr Debono laughed and nodded.)

19:15 pm

Instead of populist decisions, Dr Muscat needed to learn from the countries which had not taken the tough decisions and had been brought to their knees. If what Dr Muscat was promising was to be implemented, this country could end up in the same waters as its neighbours.

19:16 pm

Last week, the EU formally took Malta off the Excessive Deficit Procedure. Dr Muscat said nothing about it because he wanted to give the impression that Malta was in a disastrous state.

19:17 pm

(PN whip David Agius is speaking to Dr Debono)

19:18 pm

This lack of sincerity was not the proper way to prepare the people to make the right choice at the coming election.

19:19 pm

(Some friendly banter with Nationalist MP Frans Agius)

19:20 pm

Dr Gonzi recalled that five years ago he had warned of storm clouds on the horizon, but the country managed to ride the storm. However, Dr Muscat's promise could destroy the foundations which had been laid for Malta's growth. His promises were undermining the country's credibility. One could not promise matters which would cause many millions because that would mean raising the deficit well above 3%. The inevitable blow would be suffered by Malta's families, workers and students, who would see a deterioration of services, unemployment and new costs.

19:23 pm

Last Wednesday, Dr Muscat had said the country needed a change of direction. But to what direction? Eight years ago he did not want Malta in the EU. But it was proved wrong and needed to change direction. It would be a major mistake if Malta changed direction now, as Labour wanted.

19:24 pm

Five years ago Labour did not want Malta to adopt the euro. That was another mistake. Euro adoption meant greater investment and protected Malta from the circumstances suffered by countries such as Iceland.

19:27 pm

Two years ago Dr Muscat urged the government to do what Cyprus was doing. He had claimed that there was something 'fundamentally wrong' in what the Maltese government was doing. But two years on, using Muscat's yardstick, there was nothing wrong in Malta's economic policies. What was consistently wrong was the choices which Dr Muscat was making. Perhaps Dr Muscat would now explain to the people what was happening in Cyprus?

19:32 pm

Why didn't Dr Muscat tell the people how taxes were now soaring in Cyprus, as was public borrowing? Unemployment among young people was now 27% and the economy had shrunk by 2.7%. It was bad enough that Dr Muscat was making these mistakes, but he would humiliate the country if he repeated those mistakes in Malta.

19:35 pm

There were very few countries which could present the sort of Budget which the Maltese government had presented. That was because they had not made the responsible choices in the past. This Budget built on the sacrifices, hard work and achievements of the past five years.

19:37 pm

The Budget measures were aimed at economic growth, including incentives for SMEs. There were reductions in stamp duty to help home buyers and the construction industry.

19:37 pm

(Jeffrey Pullicino Orlando and Jesmond Mugliett still not in Chamber.)

19:40 pm

Over the past five years, the government gave €200 million in tax credits which translated into investment of €500m. The tourism sector had seen four years of records despite SARS, the Icelandic volcano, the Libyan crisis, Air Malta's problems and the financial crisis abroad. Tourist arrivals were up 11% over 2008. Tourists were staying longer, and spending more.

19:42 pm

Tourist spending had increased by 27% and hotel profitability was up. Yet the Budget was increasing funding for the tourism industry.

19:42 pm

(St George's Square is totally cordoned off and is accessible just to MPs. A small crowd of people have gathered at a nearby cafe, otherwise, there are no people present.)

19:45 pm

Dr Gonzi noted that the leader of the opposition had said he would invite him to open the new parliament. He would, Dr Gonzi said, also await invitations to open the new cancer hospital, the flood relief project, the interconnector, the new Mcast campus, the new facilities at the University, the bio-Malta campus, and so much more than was being done by this government.

19:49 pm

Turning to the income tax measures, Dr Gonzi said the Budget was launching the process for a scaling back of the top rate of income tax from 35% to 25% over three years. This measure, he said, had to be seen in other measures taken by this government over the years which benefited all sectors of the population as well as other targeted specifically to parents, those who used childcare centres, those who employed more persons, those who sent their children to sports events, those who paid for old people's homes, and host families. This government also removed the departure tax, the TV tax, reduced tax for part-timers and tax cuts for women who returned to work. (applause). And still, Dr Gonzi said, the deficit was going down.

19:51 pm

Dr Muscat was complaining that the tax burden was rising, But it was tax revenue which was actually rising, as the economy grew. Maltese workers remained the less taxed in Europe, even before the tax cuts announced in this Budget. But Dr Muscat should be careful that his promises would not lead to increased taxation, as happened with the 33 taxes introduced by the Labour government.

19:57 pm

Turning to minimum wage, Dr Gonzi said basic minimum wage was not taxed, but other non statutory income was taxed and always was. But then Dr Muscat did not want to raise the minimum wage. At present, married couples on the minimum wage, as well as parents on the minimum wage, were not taxed. It was only those who filed a 'single' tax return who were charged income tax on their bonus - a total of €67 per year after enjoying an increase of €212 in their income. Dr Muscat was saying such people would not pay income tax under Labour. For the government, all those on a minimum wage should not pay tax. The difference between government and opposition was that the government felt it should hep those on the minimum wage to improve their condition and earn more. But Dr Muscat, in typical socialist manner, decided only to write a cheque. he was being generous with other people's money. The government was offering training to those on the minimum wage and had announced that those on the minimum wage who attended just five hours of training per week to acquire a new skill fr six months would receive an addition €25 per week. Even those earning up to €300 per week could benefit from this scheme.

19:59 pm

Thus Budget also included higher stipends that would benefit 1,400 students.

20:01 pm

Families with children would continue to enjoy more benefits. Mothers who returned to work would continue to have one tax-free year. Maternity leave was being extended. Parents would continue to pay less income tax from this year thanks to the parents' computation. Children's allowance was up by €100 on top of another €100 increase last year. Foster parents would also see an increase in their allowance to €70 per week.

20:06 pm

Turning to education, Dr Gonzi said this legislature was dominated by massive investment in all sectors. In five years Church schools alone received €196m from the government. €212 million went to the University and there were major increases too for Mcast and the ITS. The number of students continuing to study after secondary school had shot up from 43% to 82 per cent .

20:08 pm

Dr Gonzi said the people should take nothing for granted. A few days ago, MEP Edward Scicluna had said funds could be shifted from one area to another, But he did not say from where the funds would be shifted. He should be clear now, so that the people could make their choices.

20:09 pm

(Alfred Sant reads a book by Emile Zola while Dr Gonzi refers to him.)

20:09 pm

Malta now had twice as many learning support assistants as it had five years ago.

20:09 pm

(Jeffrey Pullicino Orlando and Jesmond Mugliett enter the House together.)

The less said by Labour on education, the better. One only needed to remember Labour's broken promise on stipends the last time it was in government, when students were told to borrow.

20:16 pm

Turning back to health, Dr Gonzi said the government was giving 1,300 different medicines free of charge. Waiting lists were going down thanks to agreements with the private sector for the use of facilities. The breast screening service had saved the life of 150 women and now colorectal screening had been introduced, The Pharmacy of Your Choice scheme was being extended further.

20:17 pm

In this Budget the government had extended the allowance for the elderly to those aged 78 and over, instead of 80, and this age threshold would go down further in the following year,

20:18 pm

(Franco Debono speaks to Minister Chris Said.)

20:19 pm

This government was also raising assistance for persons with disabilities and those who employed them.

20:21 pm

The government, Dr Gonzi said, was aware of the problems faced by farmers because of rising animal feed prices and was making provision for this in the Budget. Furthermore, the government had announced measures to ease the transfer of land because farmers in the same family.

20:23 pm

Dr Gonzi also highlighted investment in the environment, which resulted in the cleanest sea water in the Mediterranean.Malta now also had new waste disposal facilities. Many roads had also been rebuilt and a €56m flood relief project was under construction.

20:24 pm

(PL whip Carmelo Abela is having a long conversation with Mr Mugliett on the PN benches. Mr Abela sat on the seat of Dr Pullicino Orlando, who went to speak to government whip David Agius. He also said hello to Dr Debono.)

20:26 pm

The prime minister highlighted measures in Gozo to help businesses and employers as well as several infrastructural projects including roads, gardens and restoration of the bastions, The government wanted more jobs for the Gozitans in Gozo and wanted to see further development of the services sector on the sister island. Studies on a possible tunnel between Malta and Gozo would continue to assess viability and technical feasibility. If the studies were positive, the tunnel would be built.

20:28 pm

(Franco Debono is getting ready to speak. He is going through some papers.)

20:28 pm

(Dr Debono is now speaking to the Speaker.)

20:29 pm

(PN deputy leader Simon Busuttil has entered the House.)

20:29 pm

Concluding, the prime minister thanked the Maltese people for their courage and confidence amid the challenges of the past few years. The people had stayed united while respecting diversity, they had integrated themselves in the EU and made EU membership a success. He was grateful that society was more inclusive, he was grateful to young people who had opted to continue to study and instilled new enthusiasm in the country. He thanked the workers for showing investors how Malta was an attractive investment destination. The future now beckoned. There was nothing which should discourage Malta.

20:29 pm

(Murmurs in Strangers Gallery get louder as excitement grows ahead of vote.)

20:32 pm

The tools, the foundations, were in place for Malta to continue to make progress in all sectors including the energy sector where it would be able to offer competitive rates.
The greatness of any people was measures by its ideas, values and culture. These were what gave him confidence that the people would continue to make responsible choices, Dr Gonzi concluded.

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